What points should I consider when choosing an accounting system

[Nathan]

Hi,
I would like to gather a list of important points that I should
consider when looking at different accounting software packages. Your
help is greatly appreciated. We are a small to mid size consulting
company (environmental research) with approximately 100 employees and
five offices across Canada and the United States (satellite offices
exist in other countries). Our projects range in size from tens of
thousands to millions of dollars. The following information may be of
use:

-Inventory is not that big of an issue as we tend to sell our
expertise (and purchase supplies on behalf of our clients - i.e. 1000
radio tags for tracking fish).
-Time charged to different projects must sometimes be differentiated
as field vs. office. A particular state charges special tax on time
charged.
-We have both accounting and software/database expertise in-house.
-Staff utilization statistics are a major issue. We have developed
methodologies of calculating these statistics and would prefer, if
possible, to be able to incorporate them into the software.

We are currently using a 1980's DOS package that does little other
than serve as a general ledger. Invoicing, staff utilization, etc is
done largely by hand.

There may be other pertinent information that I have neglected.
Please let me know.

Thank you very much.
Nathan

 

[Sarah Berel-Harrop]

this has "mid range" software reviews - http://www.cfo.com
also, the July, 2002 Journal of Accountancy has an in depth review of "mid
level" accounting software but i don't think it's on-line

I have that article, it is a review of mid-range ERP
programs. Most are more geared to manufacturing
I think.

 

[Bob]

I have that article, it is a review of mid-range ERP
programs. Most are more geared to manufacturing
I think.

yes, and I see that it's actually May, 2002 - but i have another piece of
advice for the orginal poster, just call up the CFO or controller of "Tetra
Tech" (an environmental consulting co.) or a company like it, they would
probably be willing discuss their accounting system and give
recommendations,

 

[SBT Bill]

The suggestions I would make are 1) ACCPAC PRO. This is a solid midrange
package that comes with source code and uses the DBF style of table.

The code is a bit off standard but your database should be able to handle it.
There is a very good data dictonary so special reports are easy. You could use
R&R, Crystal, or VFP.

The package generally cost about $15,000.
Other packages that might fit are Accountmate, Cougar Mountain, ACCPAC Vision
Point.

Great Plains Dynamics (now MS) and Solomon would be ones you might look at but
they do not have the flexibility of ACCPAC source products. I have a fairly
low opinion of MAS 200 and its group.

What you definitly want to stay away from is Quickbooks, Peachtree, and MYOB.
They do not have the horse power to handle your needs.

If you are in my area I can get you 30 day evaluation copies of PRO or Cougar
Mountain.

Bill Couture
http:\\www.sbtbill.com

 

[Nathan]

Thank you for your input. I am writing a business case on behalf of
my manager that is to be presented to our President. This president
is very resistant to technological changes. What topics would you
include in such an accounting-oriented document? I am a software
developer (with some accounting background - 2yrs CGA back in the
early 1990's).

Writing such a document must be a very common occurrence but I do not
see a lot of posts on the subject in the newsgroups.

Thanks again.
Nathan

 

[Bob]

Thank you for your input. I am writing a business case on behalf of
my manager that is to be presented to our President. This president
is very resistant to technological changes. What topics would you
include in such an accounting-oriented document? I am a software
developer (with some accounting background - 2yrs CGA back in the
early 1990's).

Writing such a document must be a very common occurrence but I do not
see a lot of posts on the subject in the newsgroups.

Thanks again.
Nathan

if the "business case" is a recommendation for a new accounting package just
explain the problems of the old system and the benefits and costs of the new
accounting software, -- however i would find out more of what's expected
from your manager and from the accounting dept. !

 

[Arnold]

Nathan,

First, don't start looking until you know what you are looking for.

You need to determine what your president likes about your present
system and what he feels MUST be improved. This will generate your list
of "must have" features. He is the first one to please.

Second, you need to find out the same thing from the others in the
office AND then those in the field. Add this to the "must have" list.
Now, find out what what others feel they would like to have, starting
with the president, if they could design their own software. This is
your "nice to have" list and it is what allow you to move from meeting
the company's minimum needs to getting the best software you can.

The point is to buy what your company needs, not to be sold what a
salesman wants you to buy. Beware of accountants that are conversant
with a system and want you to buy it because they "know it." Their
convenience is secondary to your needs. If they don't see it that way,
you need a new accountant.

Based on your description, it sounds like you need an accounting program
that does job cost accounting. Do you set up a project with budgets for
labor hours and other costs such as equipment, materials, subcontracts,
etc.? If so, that is specifically what job costing is designed to
track. Job costing will accumulate actual costs versus budgeted costs,
line by line, phase by phase, job by job. The general ledger will only
have summary information, but job cost reporting will provide all of the
detail you need.

As to your programming expertise. If you get the right accounting
software, it should handle your company without needing to have you
program it. You should not be obligated to compensate for the
inadequacy of the software. Buy a complete package.

From your description, you might want to ask the following:

Do we need to be able to handle multiple currencies?
Do we need to be able to handle Canadian payroll?
Do we need multiple state payrolls?
Do we need to track projects individually?
Do we need to be able to add "burden" to projects to cover headquarters
and indirect overhead costs?
Do we need to provide reports to clients for "cost plus" contracts?
Do we need to export data to spreadsheets?
Do we need to create custom reports within our accounting software?

If you don't get the right software, you will spend most of your time
trying to compensate for its weaknesses. Here is a word of insight:
There is not necessarily a parallel between the cost of the software and
its ease of use and functionality. I was controller for a $500 million,
1,500 employee company that spent $425,000 on accounting software and
$450,000 on hardware. It was only "coincidental" that it was the one
and only hardware and software the IT Manager knew. It cost an
additional $300,000 to implement. Later, it became apparent that we had
wasted a fortune on software that was less than ready for prime time.
Names are withheld to protect the guilty. There were much more
affordable systems with superior functionality that we should have
chosen. Early one morning, the IT Manager went into the computer room
and shot himself through the heart.

Beware of software companies and "experts" that tell you the cost of
implementation will be equal to the cost of the software or even more.
In a word, their software sucks! If it is so difficult to set up and
train the staff, it will be a nightmare to run for years into the
future. Too many software companies have gotten away with this for too
long. If the software was written by programmers for the programmers'
convenience, you will pay the price for their poor quality work. Look
for a software that has an implementation of less than a month and
training costs of 25% or less. If you pay more, you are getting
yourself into a long term relationship with trouble. That pricey
program we were sold took six weeks of classroom training before we
could even have a terminal on our desks. By the time we finished with
the classes, we had forgotten most of what the classes covered. It was
a nightmare.

Test the companies you are considering using. Without warning or
notice, call their tech support department and see if they answer the
phone or if you have to wade through menus of choices only to end up
leaving a voice mail message. Find out how many days it takes to get a
response. If it takes more than an hour, they are providing the kind of
service that you cannot tolerate. If they have voice mail, it is
unacceptable. If their service sucks you will never be a happy
customer. When you have a problem, you need an answer, not a voice mail.

These are high standards. Only a few companies will meet them. They
are the ones you want to do business with. If you are willing to accept
less, you can find a lot of companies that will take your money and give
you less than you need and deserve. It's your money. Be unreasonable.
Expect good software and better service.

Arnold S. Grundvig, Jr.
President
A-Systems Corporation
Job Cost accounting software since 1978
www.a-systems.net